Nikola Corp Shares Dip Following Announcement of New Stock and Note Offerings

Nikola Corp (NASDAQ: NKLA), a company known for its electric vehicle technology, witnessed a decline in its stock price on Thursday. The dip came as a result of the company revealing its plans to issue new offerings in the market.

Proposed Offerings by Nikola

Nikola is preparing to issue $100 million worth of common stock alongside $200 million in green convertible senior notes that are expected to mature in 2026. These offerings are to be made available through public platforms. In conjunction with these offerings, Nikola is expected to give underwriters the option to buy additional shares worth $15 million in common stock and up to $30 million more in notes.

Use of Proceeds

The proceeds from the sale of common stock are earmarked for working capital and general corporate endeavors. Concurrently, the funds received from the notes offering are set to be directed towards financing eligible green projects that align with the company's future or ongoing operations.

Financial Highlights

Previously, Nikola succeeded in raising $250 million in the third quarter, effectively bolstering its unrestricted cash reserves by $136.2 million. The company's recent earnings report highlighted a significant increase in its unrestricted cash position since the first quarter, reporting a threefold rise.

Impact on Stock Performance

Nikola's share price has been on a downward trajectory throughout the year 2023, showing a considerable over 54% slump since the beginning of the year. Following the announcement of the offerings, the stock further plunged by 20.6%, trading at 78 cents.

Nikola, Stocks, Offerings